Virtu Financial Makes Bid to Acquire KCG Holdings

Trading firm Virtu Financial Inc. has made a bid to acquire rival KCG Holdings Inc., which could help shore up businesses that have been struggling with dampened market volatility.

Virtu has proposed a price of more than $18 a share, people familiar with the matter said, or at least $1.2 billion based on a recent share count. That would represent a premium of about 30% over KCG’s share price Wednesday afternoon.

KCG was evaluating the offer with the help of advisers, the people said. But it is far from clear whether it would support further discussions with Virtu and it is possible there will be no deal.

A deal between Virtu and KCG would combine two major players at a challenging time for securities-trading firms, which have been seeking to maintain revenue growth amid low market volatility.

The New York-based firms make markets in stocks, bonds and other instruments, meaning they buy and sell in large volumes to facilitate trading, and earn a small amount on each transaction. While market indexes have been soaring, low volatility in prices makes it harder for these firms to turn a profit on individual trades.

Breaking the story

Telis Demos and Liz Hoffman were first to report Virtu Financial Inc. has made a bid to acquire rival KCG Holdings Inc. for more than $1.2 billion, according to sources. The offer, which is being evaluated by KCG, would help shore up businesses for the companies struggling with dampened market volatility.

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